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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
O R D E R Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 14.08.2024 for the AY 2018-19.
The first issue raised by the assessee is against the order of ld. CIT (A), confirming the order of the ld. AO when the notice u/s 143(2) of the Act was issued beyond the limitation i.e. on 16.01.2023 which should have been issued on 30.06.2022 and the provisions of Section 292BB of the Act cannot save the delay in the issue of notice but the same relates to service of notice and the mere participation of the assessee in the assessment proceedings cannot cure the inherent non- availability of jurisdiction.
The facts in brief are that the assessee filed the return of income on 31.10.2018, declaring total income of ₹ 1,93,89,490/-. A search u/s 132 of the Act was carried out by the investigation Wing on various places of finance brokers on 30.11.2018. During the course of enquires of the Investigation wing, it was revealed that the assessee was engaged in dubious financial transactions with Anil Kumar Kesara, finance brokers Sanwaria & Kasera to the tune of ₹28,15,00,000/-. During the financial year 2017-18, the investigation wing found that the said broker was engaged in arranging cash loans to the interested parties in lieu of commission and the beneficiary of finance brokers were identified on the basis of analysis of Rukkas, Data available in public domain, market information, statements recorded and explanation provided by the broker. Accordingly, the proceeding u/s 147 of the Act were initiated after following the procedure as provided u/s 148 of the Act. The notice u/s 148 of the Act was issued to the assessee on 23.03.2022. The assessee complied with the said notices vide letter dated 25.03.2022, submitting therein that the return of income filed on 31.10.2018, may be treated as return filed in response to notice u/s 148 of the Act. Thereafter, the notice u/s 143(2) of the Act was issued on 16.01.2023. During the course of assessment, the assessee responded to various notices/ questionnaire issued by the ld. AO. The evidences collected during search and post-search proceeding, which revealed that the finance brokers were engaged in unaccounted cash transactions amounting to ₹28,15,00,000/-, for which the assessee has not produced any documentary evidences and accordingly, the ld. AO held that the assessee is engaged in various dubious transactions with Anil Kumar Kesara, finance brokers
Aggrieved assessee preferred an appeal before the ld. CIT (A), challenging he additions on legal issue that the notice u/s 143(2) is barred by limitation, as the same was issued beyond a period of 3 months from the end of the financial year for which the return was furnished. The ld. CIT (A) dismissed the appeal of the assessee by holding that the delayed issuance of notice on 16.01.2023, would not invalidate assessment proceeding and the consequent assessment framed as the provisions of Section 292BB of the Act cure the defects which is procedural defect and moreover, the assessee participated in the assessment proceeding. The ld. CIT (A) after taking into account the contentions of the assessee dismissed the appeal of the assessee by observing and holding as under:-
“7.2. Findings on Ground of Appeal 1: 7.2.1. The assessee submitted that the assessment is bad in law and should be quashed and assessment to be held invalid as no notice u/s 143(2) was issued within the time allowed under the statute when the assessee duly complied with the notice by filing a letter dated 25.3.2022 that the original return filed by the assessee u/s 139 on 31-10-2018 vide e-filing acknowledgement No 364691911311018 be treated as return u/s 148 which was sufficient compliance under the law. The assessee submitted that AO has issued notice u/s 143(2) issued on 16.1.2023 well beyond the time prescribed in section 143(2). 7.2.2. The assessee placed reliance heavily on the judgment in the case of Hotel Blue Moon ACIT v. Hotel Blue Moon [(2010] 321 ITR 362 (SC). The assessee also placed reliance on the judgments of various courts in his submission. The case laws cited by the assessee have been perused. 7.2.3. The undisputed fact of the case of the present assessee is that notice u/s 143(2) was issued by the AO on 16.1.2023 whereas the assessee filed a letter dated 25.3.2022 stating that return filed u/s 139 be treated as return filed u/s 148. The 7. The ld DR on the other hand relied on the order of ld CIT(A) on this and submitted that the delay in issuing notice is taken care of by nthe provisions of section 292BB of the Act and therefore the legal ground raised by the assessee may be dismissed.
We have heard the rival contentions and perused the materials on records as placed before us. Undisputedly the notice u/s 143(2) was issued after the time line as mentioned in the first proviso to section 143(2) of the Act. The facts qua the notice u.s 143(2) are already discussed above and are not being repeated again.The ld DR candidly admitted that the notice was issued late by the AO however that
Since we have allowed the appeal of the assessee on issue of notice issued u/s 143(2) being barred by limitation , the other grounds raised on legal issues as well as on merits are not being decided at this stage
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 17.03.2025.